MACD

MACD (Moving Average Convergence Divergence) measures the relationship between two exponential moving averages of price. InvestSense uses the standard 12/26/9 configuration on daily closes — the same one used across most platforms.

The three components

The MACD line is EMA(12) minus EMA(26) — the gap between a faster and slower trend average. The signal line is a 9-day EMA of the MACD line itself. The histogram, which is what InvestSense highlights as the momentum reading, is MACD minus signal.

Reading the histogram

A positive, rising histogram means short-term momentum is strengthening relative to the longer trend; negative and falling means the reverse. When the MACD line crosses the signal line, that crossover is the classic event traders watch.

Why it lags

MACD is built entirely from moving averages, which are themselves backward-looking — so MACD confirms a move that's already underway rather than anticipating the next one. In a sideways market it tends to produce frequent crossovers with little real follow-through, which is exactly why it's one input among several in the Quant Engine's analysis, not used alone.